Fort Walton Beach Council agenda — 8-11-14--proposed budget — reading text

Barney).Barney). StaffStaff willwill continue continue toto monitormonitor investments investments toto evaluate evaluate whether whether thethe enhancedenhanced diversificationdiversification andand thirdthird - - partyparty managementmanagement isis resulting resulting inin additionaladditional valuevalue toto thethe City.City. ChyChy ofof FortFort WahonWahon Beach.Beach. FLFL Budget Overview Debt Issuance Debt Limit — The State of Florida does not place a legal limit of debt on municipalities. However, general obligation debts greater than one year require voter referendum approval. Special revenue debt is pledged by a specific revenue source and limited by available revenue; therefore it is not subject to voter referendum. Any new debt will be carefully evaluated as to its impact on operations. Debt Philosophy — The use of debt financing for long -term capital improvement programs is based upon two types of debt financing: 1) " pay -as- you -go" and 2) " pay -as -you- use ". In practice, the City uses a mix of these two basic methods to finance its Capital Improvements Program, with pay -as- you -go financing used for recurrent capital expenditures and with pay -as- you -use financing used for long -term, non -recurrent capital expenditures. Pay -As- You -Go — A type of financing whereby current revenues, taxes, and/ or grants rather than long term debt are used to pay for capital improvements. Example: annual street paving. Pay -As- You -Use — A type of financing whereby long term debt is used to pay for capital improvements. Example: debt financing for a new municipal facility. Debt Policy Statement —The following policy statements govern the City' s use of debt to finance long -term, non -recurring capital improvements: Recurrent capital expenditures for replacement, expansion and/ or acquisition of plant, equipment, and/ or motor vehicles will be financed on a pay -as- you -go basis from funds available and appropriated in the City' s annual operating budget. Only long -term, non -recurrent capital . expenditures for public improvements having a relatively greater cost and longer useful life, and which require additional funding over and beyond the fiscal capacity of the City' s annual operating budget, will be financed through the issuance or creation of long -term debt. These expenditures will not be debt -financed for periods exceeding the projected useful life of the improvement. All capital improvements financed through the use of long -term debt will be consistent with the adopted Capital Improvements Program and the current fiscal year' s adopted Budget. Revenue sources that will be used to pay long -term debt will be conservatively projected to ensure that such debt is adequately and soundly financed. The City' s total general obligation debt will not exceed 10% of its assessed valuation. The City does not currently have any general obligation debt. The City will use special assessment revenue bonds or other self -supporting bonds where possible and appropriate to finance long -term, non -recurrent capital improvements, rather than general obligation bonds. The City will establish and maintain effective communications with bond rating agencies to keep them informed of its financial condition. Debt Capacity — The debt capacity of both the General Fund and Utilities Fund is contingent upon available resources and existing debt. The current outstanding debt requires a coverage ratio of 1. 25 time earnings. The General Fund is at 10. 92 and the Utilities Fund is at 1. 38. The Sanitation and Stormwater funds are debt -free. Ch of Fort Wahon Beach, FL Budget Overview Debt Ratio — Indicates the percentage of assets financed via debt, and therefore the financial flexibility of the fund. Actual Budget FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 General Fund 14. 0% 13. 7% 36. 5% 30. 7% 30. 7% Utilities Fund 33. 0% 33. 0% 33. 2% 48.4% 49.8% Golf Fund 87. 3% 97. 9% 124. 4% n1a n/ a Stormwater Fund 0.0% 0. 0% 0. 0% 0. 0% 0. 0% DebtDebt RatingRating — — TheThe CityCity maintainsmaintains aa AAAA ratingrating withwith bothboth StandardStandard andand PoorsPoors andand Fitch.Fitch. DebtDebt Principal Principal andand InterestInterest PaymentsPayments byby FundFund GeneralGeneral FundFund Utilities Fund i TotalTotal Fiscal Yr PrincipalPrincipal InterestInterest PrincipalPrincipal InterestInterest Principal Interest 2014 -15 701. 824. 91 363. 533. 38 906. 383. 89 696. 806. 15 1. 608208.80 1. 060.339. 53 2015 - 16 713. 627. 13: 344. 849. 62 ` 927.927. 959.959. 9 1 673.980. 13 i 1. 641. 587. 04 1. 018.829. 75 2016- 17 720. 926. 86: 325. 776. 18 1 949. 756. 91 € 650.558. 13 1. 670.683. 77 976. 334. 31 2017 - 18 726. 853. 33: 306.353. 71: 976. 779. 13: 625. 735. 91 1. 703. 632.46 932. 089. 62 2018 -19 745. 592. 76 1 286.461. 08 € 1. 004004 . . 030.030. 8686 €€ 600.600. 084.084. 1818 1.1. 749.749. 623.623. 6262 886.886. 5452654526 20192019 - - 2020 741.741. 929.929. 5555 267.267. 599.599. 5656 ` ` 1. 031. 516.47 573. 598.57 1. 773. 446.02 841. 198. 13 2020-21 738. 566: 15 249. 762.21: 1. 059240.43 545. 818. 35 1. 797, 806.58 795. 580.56 2021 -22 691, 497. 00: 232. 826. 72 , 1. 087. 207. 30 517, 176. 48 i 1. 778. 704. 30 750.00320 2022 -23 711, 782. 00 216291. 62 1115. 42171 487, 372.07 I 1. 827, 203. 71 703. 663. 69 2023 -24 685. 298. 00 ` 17_9.864.34 1. 143. 888. 39 456.480.39 i 1. 829, 186. 39 636.344.73 2024 -25 700. 232. 00 162.430.20 1. 177. 612. 15 424. 694. 13 1. 877. 844. 15 587. 124. 33 2025 -26 720. 054. 00 144.607.58 1 1. 211. 597. 90 ' 391. 795. 88 1. 931. 651. 90 536.403. 46 2026 -27 739,629.00 j 126. 282. 86 1. 245. 850.64 i 356, 528. 14 1. 985, 479. 61 482. 811. 00 2027 -28 3, 281127. 00 1 107.460.50 1, 280.375. 47 320.083. 31 4.562, 502.47 427. 543. 81 2028 -29 288, 365. 00 20.271. 58 1. 320. 177. 57 282, 456.21 1. 608542. 57 302. 727. 79 2029 -30 291998. 00 13. 639. 18 ` 1, 36026227 _ 243. 416.51 1. 654260. 27 257. 055. 69 It 2030 -31 299, 010.00 67877. 24 ` 1. 400.634. 92 202. 958. 86 1. 699.694. 92 209.836. 10 2031 - 32 1. 441. 301. 05 161. 192. 73 1. 441. 301. 05 161. 192. 73 2032 -33 1. 487. 266.24: 118. 002. 54 1. 487. 266. 24 118.002.54 2033 -34 1. 528. 536.70 ? 73. 157. 56 1. 528.536. 70 73. 157. 56 2034-35 690.000.00 31. 050.00 690.000.00 31. 050.00 13. 501. 312. 69: 3. 354. 887. 56 24. 345. 799.91 € 8. 432.946.23 i 37. 847. 112.60 11. 787. 833. 79 Princi al Interest Total Existing Debt